Avoid These Six Common Mistakes With Careful Estate Planning

As the holidays approach and we look forward to spending time with family and friends, protect yourself and your loved ones by steering clear of these common mistakes.

1. Signing “I love you” wills.

Recently, we have seen more cases where a person chooses to leave all of their assets to their spouse. These “I love you” wills mean that you surrender all control over your assets and your spouse chooses what to do with them. While it may sound romantic, it can cause a number of problems, particularly in blended families.

2. Creating joint accounts.

A common mistake is to add a family member’s name to a bank account with the idea that it will make the account easier to access if you pass. This can cause a host of issues. A better idea is to address these accounts as part of an overall estate plan.

3. Overlooking outdated beneficiaries.

All too often, we hear about families who failed to update their beneficiaries. As many assets are distributed based on beneficiary designation forms completed throughout your lifetime, outdated forms mean that assets could be passed to siblings, nieces, or nephews instead of your own children.

4. Neglecting out-of-state real estate.

If you own a vacation home in another state, expect it to go through ancillary probate unless you title it to a revocable trust. Ancillary probate can be a particular problem if you own property in states like New York, Florida, or California.

5. Failing to plan.

An estate plan gives you the power to decide what happens after you pass. It gives you control over who will make financial and health care decisions for you if you become incapacitated. It makes life simpler and easier for your heirs.